Member Info for spike501

"No one loses until they sell.

FACT."

This gamblers charter was brought to you in association with William Hill

“ There are more knowns here than unknowns hence the very high 95% C.o.S.”

If the risk is so low then why would you expect the share price not to reflect that - contrary to popular belief the market is not generally that stupid to miss easy wins, rather with small caps it tends to be the other way.

This has risk - it has operational risk, it has drilling and geological risk and it has funding and dilution risk.

I believe the market has slightly mis priced this risk and so it offers a good opportunity, but it’s certainly not a no brainer otherwise the chance of substantial return would be limited.

"the rimin casino @ Wressle alone has been valued at 40p,"

Arden have just released an updated broker note today where they value Wressle production at 3p per share and Wressle contingent resource at 7p per share.

SP Angel either know something that Arden (and the rest of the market) don't, or somewhere have made a big model error.

It’s only a good point if you’re some sort of dimwit

This EWT is not a success

They don’t arrive in the boiler room this early

“It flowed, it's not sustainable just yet. As you fine we'll know that's not unusual for UK onshore“

Great, how many millions have been spent not getting it to flow and how many millions more might need to be spent to try and get it to flow?

It’s not unusual for Uk onshore which is why most Uk onshore “biggest since Wytch farm” end up coming to nothing.

“ Which part of recovered to surface are you confused by?”

An extended well test is to test flow rates to determine commerciality. Bringing samples to the surface does not cut it - how many millions have they spent bringing some samples to the surface?

Shambles - didn’t flow, large reduction to estimated in place figures for West Newton so they’ve brought estimates from undrilled prospects to try and distract.

There seems to be a slight change of sentiment in recent days around gold stocks - gold has been somewhat out of favour for the last few months, but gold stocks in general have underperformed gold.

In the last couple of weeks now gold has been treading water at around the $1750 mark, however GDX (the ETF tracking gold majors) is around 8% of the lows it hit at the end of September and GDXJ (the ETF tracking large junior gold miners) is up around 10%.

With gold I generally like to follow Jordan Roy Byrne who has been pretty good with his forecasts over the last couple of years especially in predicting this consolidation with retests of $1750 or even $1680 which has come to pass. One of his predictions is also that sentiment will return to the miners first and then to gold and that this will coincide with the stock market getting toppy and the next leg up in gold will follow when the stock market begins to correct - all this so far seems to playing out pretty well.

Well hopefully now a decent trading update is out, the company can close the note issuance they are clearly planning which will provide the funds needs for the large CAPEX they have in the plans next year - that would then reduce the concern that a large equity issuance is coming.

Although I wouldn't rule out an equity issuance alongside the note issuance, but equally given the low free float here, its not impossible it can be done at the SP or even at a premium and reducing more equity which would reduce the percent of the company that the family holds, would also actually be a positive.

Good continued progress, slightly lower than I thought it might be and now they will need to achieve 9,500oz in Q4 to achieve the 30,000oz target they put in the most recent presentation, however that is also the quarterly rate they need to achieve to hit the targets in 2022 so potentially its possible.

Good to see grades continuing to improve, that really has been a success this year.

Main open question for me is what is the actual processing capacity of the plant - nameplate is 850koz, but they still have fallen short of processing everything mined - it could be a timing thing, but the do have inventory from last year that is still awaiting processing.

And I’m sure UJO is top of that list

Its intriguing - brokers squeeze the juice out of things like discount rates, success rates, risked rates etc etc as these are all assumptions that no one can really challenge as being intentionally misleading as they are simply opinion based.

However, its not like a broker to simply ignore an underlying CPR and massively inflate the recoverable resources as they have done here, which makes me think they are being fed by the company with some justification.

Something weird with this Broker note - SP Angel assume Wressle production is worth £35.8million (31.8p per share) on a discounted cashflow basis. This is only from the Ashover Grit, the further potential from Wressle is accounted for seperately.

£35.8million even on an undiscounted revenue perspective is 664,857 barrels in total at $70 oil (which is the figure SP Angel use), so on a discounted cashflow basis must be closer to 750,000barrels.

Yet the net to UJO based upon the last CPR is just 260,000 barrels, so on what basis have SP Angel tripled the recoverable oil? They assume peak production for 750boepd continues until the end of 2023.

Brokers obviously look at the bull case, but they don't generally inflate underlying assumptions off their own back, its usually fed from the company - is Wressle recoverable perhaps going to be materially upgraded in terms of recoverable based upon the current production profile.

Btw if Buffalo drill is successful you’ve got to think it makes a lot of sense for Jadestone to farm in here and use it’s balance sheet for the development - ADV then have limited exposure to financial risk of the development and would have a less leveraged balance sheet allowing more flexibility for other opportunities.

“ Looks like everything is running ontime for an early November spud so hopefully only 5 weeks away.
Also worth noting JSE has an Mcap of £400m and targeting 20,000bpd for the end of year, with an early production system and another deal before the end of the year ADV will not be far of that Mcap also.”

Jadestone has about £70million in cash and no debt so the enterprise value is nearer £330million, has a 2P reserve base of approx 50million barrels across multiple developments and substantial additional contingent resource.

If Buffalo-10 is successful with net to ADV is 12.5million 2P and there is around £50million debt needed to bring it to production, although hopefully an accelerated cash flow plan can phase that.

This won’t get to a market cap of £400million - which would be an EV of nearer £450million on 12.5 of 2P even if production does hit 20,000bopd - apart from anything else that would drain all reserves in less than 2 years (it wouldn’t as production will decline).

I’d be looking here for $10 per barrel of 2P if this is proven up - always a decent benchmark, which is giving a market cap of just about £90million, although some market exuberance to push it beyond that would be nice.

Have a day off Heid - best estimates of West Newton are less than a weeks UKs usage.

“its always been about wressle for me.west newton is a bonus and i can wait for the appeal.”

This is nonsense - regardless of initial flow rates there simply isn’t anywhere near enough oil contained at Wressle to support the current SP.

Even the house broker who is paid to ramp only values total Wressle at 11p per share thats before recent dilution.

Thanks Bald_eagle, the current investor presentation was in my view pretty clear that there remain plans for just one new plant and that was now being planned at Teren Sai.

As I say what’s important now though is fully utilizing the one they have.

"And so your point is??"

What you just said